topic applying for an auto loan in Auto Loans

applying for an auto loan

Anonymous — Mon, 28 Apr 2014 16:58:38 GMT

Hi i have some questions about applying for an auto loan. I recently pulled my fico scores and my transunion score is 651. I called my credit union and was told that the minimum score that was approved is 640 and above all for the going rate which is 1.99 currently. I plan on financing through my credit union because that is where i financed my other 2 auto loans in the past. I would like to buy the car before the end of the year, prefrerably in september-december. I gross over 4k a month and recently received a 2 dollar raise at my job and will get them periodically. Now heres my dillemma, I have a collections on my account from an old chase credit card should i pay this off for a paid in full or take my chances. Also i have 1800 in revolving debt that i plan to pay down over the next couple of months. I used the fico score simulator and it showed that if i pay 300 over the next 6 months my score should raise to 700-741. So should i pay off my collections account or leave it be?

Re: applying for an auto loan

pizzadude — Thu, 01 May 2014 04:05:35 GMT

@Anonymous wrote:
Hi i have some questions about applying for an auto loan. I recently pulled my fico scores and my transunion score is 651. I called my credit union and was told that the minimum score that was approved is 640 and above all for the going rate which is 1.99 currently. I plan on financing through my credit union because that is where i financed my other 2 auto loans in the past. I would like to buy the car before the end of the year, prefrerably in september-december. I gross over 4k a month and recently received a 2 dollar raise at my job and will get them periodically. Now heres my dillemma, I have a collections on my account from an old chase credit card should i pay this off for a paid in full or take my chances. Also i have 1800 in revolving debt that i plan to pay down over the next couple of months. I used the fico score simulator and it showed that if i pay 300 over the next 6 months my score should raise to 700-741. So should i pay off my collections account or leave it be?

My take on your situation is that you should leave the collection alone until after you secure auto financing. Having it update might cause your FICO score to drop if the collection "appears" to be more recent.

The only way I'd do anything with it is if you have a PFD agreement whereby they delete the collection from your reports.

Re: applying for an auto loan

Anonymous — Thu, 01 May 2014 10:53:13 GMT

i was leaning towards waiting and applying for the loan first...my collections is with midland credit management. I googled and it looks like they rarely accept ptd...so i will wait a couple of months and apply. Then look to pay it off.

Re: applying for an auto loan

pizzadude — Thu, 01 May 2014 15:26:48 GMT

@Anonymous wrote:
i was leaning towards waiting and applying for the loan first...my collections is with midland credit management. I googled and it looks like they rarely accept ptd...so i will wait a couple of months and apply. Then look to pay it off.

That's a good idea ~ Midland isn't known for being easy to work with at all.

Re: applying for an auto loan

Anonymous — Thu, 01 May 2014 21:32:45 GMT

I think i might have a problem...i pulled my transunion report today and i noticed that it shows the balance was reported march 2014. Will that lower my score for the future and should i now pay it immediately or continue to wait until financing is approved. I pulled it on transunions website and the strange thing is my score improved by 13 points from my last pull. Should i wait to the 27th of may and see if it updates again or is this normal?

Re: applying for an auto loan

pizzadude — Thu, 01 May 2014 21:38:58 GMT

@Anonymous wrote:
I think i might have a problem...i pulled my transunion report today and i noticed that it shows the balance was reported march 2014. Will that lower my score for the future and should i now pay it immediately or continue to wait until financing is approved. I pulled it on transunions website and the strange thing is my score improved by 13 points from my last pull. Should i wait to the 27th of may and see if it updates again or is this normal?

Have you pulled a FICO score? The TU website only sells FAKO scores.

Paying a collection will never improve your FICO score, unless the balance happened to be included in your revolving utilization, which usually isn't the case.

Re: applying for an auto loan

Anonymous — Thu, 01 May 2014 21:42:00 GMT

i pulled my fico last month which stated i had a 651 transunion which is the score im using when i apply for a loan after i pay my cc down. But the reason i stated the fako score is becasue it shows the reporting date on that report. But when i pulled my fico last month it just shows it as being 2 years old as of may. So if i payed it off now would i have a chance at getting approved six months from now or would it take longer to recover?

Re: applying for an auto loan

pizzadude — Thu, 01 May 2014 21:48:53 GMT

@Anonymous wrote:
i pulled my fico last month which stated i had a 651 transunion which is the score im using when i apply for a loan after i pay my cc down. But the reason i stated the fako score is becasue it shows the reporting date on that report. But when i pulled my fico last month it just shows it as being 2 years old as of may. So if i payed it off now would i have a chance at getting approved six months from now or would it take longer to recover?

It won't help your FICO score to pay the collection, and could possibly lower your FICO score. I'd leave it alone.

Re: applying for an auto loan

Anonymous — Thu, 01 May 2014 22:00:07 GMT

@pizzadude wrote:

It won't help your FICO score to pay the collection, and could possibly lower your FICO score. I'd leave it alone.

okay ill stick to my plan thanks for your help